1436942917_abs-cbn-annual-report-2014

Transcript of 1436942917_abs-cbn-annual-report-2014

CorporateINFORMATION

ABS-CBN Annual Report 2014 ABS-CBN Annual Report 2014 32

CORPORATE VALUES

In achieving our corporate vision, our values guide us through the journey.

EXCELLENCE

Judgment and Drive for Results

We use best judgment to balance speed, quality and cost to attain best returns.

Innovation & Embracing Change

We continuously explore new ways of doing things. We challenge even our past successes to achieve breakthroughs and to ensure our continuous improvement.

We champion breakthrough ideas and initiatives.

Risk-Taking

In a constantly changing competitive environment, we take action based on a careful assessment that opportunities and rewards are worth the risks. We ensure that everything possible is done to mitigate those risks.

TEAMWORK

Company Interest and Transparency

We place the good of the team over our own personal interests.

Ownership

We take personal accountability for our role, output and decision.

CORPORATE BACKGROUNDABS-CBN Corporation is the Philippines leading media and entertainment organization. The Company is primarily involved in television and radio broadcasting, as well as in the production of television and radio programming for domestic and international audiences and other related businesses. ABS-CBN produces a wide variety of engaging, world-class entertainment programs in multiple genres and balanced, credible news programs that are aired on free-to-air television. The Company is also one of the leading radio broadcasters, operating eighteen radio stations throughout the key cities of the Philippines. ABS-CBN provides news and entertainment programming for eight channels on cable TV and operates the countrys largest cable TV service provider. The Company also owns the leading cinema and music production * %/0.%10%+*+100/%*0$!+1*0.50.%*#/its content to worldwide audiences via cable, satellite, online and mobile.

In addition, ABS-CBN has business interests in merchandising and licensing, mobile and online multimedia services, glossy magazine publishing, video and audio post production, overseas telecommunication services, money remittance, cargo forwarding, tv shopping services, theme park development and management, property management and food and restaurant services, all of which complement and enhance the Companys strength in content production and distribution.

CORPORATE STRATEGY

Transforming lives by changing the media landscape is both ABS-CBNs vision and passion. The key thrusts of our business strategy are:

Anytime, anywhere, in any device or medium

As our audiences demand greater control over how and when they will consume our content, we will ensure our continued relevance by

distributing our content in the widest array of platforms that technology will allow.Our audiences will be able to reach us anytime, at any place, in any medium.

Building on our core strength in content creation

While everything around us changes the technology, the production process, the medium used to access our content our core ability to create quality content that touch, inspire and empower our viewers must remain constant. We will continue building on our core strength of content creation.

#4
CorporateINFORMATION


CORPORATE VALUES

In achieving our corporate vision, our values guide us through the journey.

EXCELLENCE

Judgment and Drive for Results

We use best judgment to balance speed, quality and cost to attain best returns.

Innovation & Embracing Change

We continuously explore new ways of doing things. We challenge even our past successes to achieve breakthroughs and to ensure our continuous improvement.

We champion breakthrough ideas and initiatives.

Risk-Taking

In a constantly changing competitive environment, we take action based on a careful assessment that opportunities and rewards are worth the risks. We ensure that everything possible is done to mitigate those risks.

TEAMWORK

Company Interest and Transparency

We place the good of the team over our own personal interests.

Ownership

We take personal accountability for our role, output and decision.

CORPORATE BACKGROUNDABS-CBN Corporation is the Philippines leading media and entertainment organization. The Company is primarily involved in television and radio broadcasting, as well as in the production of television and radio programming for domestic and international audiences and other related businesses. ABS-CBN produces a wide variety of engaging, world-class entertainment programs in multiple genres and balanced, credible news programs that are aired on free-to-air television. The Company is also one of the leading radio broadcasters, operating eighteen radio stations throughout the key cities of the Philippines. ABS-CBN provides news and entertainment programming for eight channels on cable TV and operates the countrys largest cable TV service provider. The Company also owns the leading cinema and music production * %/0.%10%+*+100/%*0$!+1*0.50.%*#/its content to worldwide audiences via cable, satellite, online and mobile.

In addition, ABS-CBN has business interests in merchandising and licensing, mobile and online multimedia services, glossy magazine publishing, video and audio post production, overseas telecommunication services, money remittance, cargo forwarding, tv shopping services, theme park development and management, property management and food and restaurant services, all of which complement and enhance the Companys strength in content production and distribution.

CORPORATE STRATEGY

Transforming lives by changing the media landscape is both ABS-CBNs vision and passion. The key thrusts of our business strategy are:

Anytime, anywhere, in any device or medium

As our audiences demand greater control over how and when they will consume our content, we will ensure our continued relevance by

distributing our content in the widest array of platforms that technology will allow.Our audiences will be able to reach us anytime, at any place, in any medium.

Building on our core strength in content creation

While everything around us changes the technology, the production process, the medium used to access our content our core ability to create quality content that touch, inspire and empower our viewers must remain constant. We will continue building on our core strength of content creation.

#4
FinancialHIGHLIGHTS


0

3

6

9

12

15

10,25110,942

12,74414,046

14,664

Consumer Sales(in P millions)

2010 2011 2012 2013 2014

0

3

6

9

12

15

5,821

8,635

6,395

10,617

13,238

Cash and Cash Equivalents(in P millions)

2010 2011 2012 2013 20140

10

20

30

40

50

60

70

80

2010 2011 2012 2013 2014

38,95946,009

51,39458,330

67,237

Total Assets(in P millions)

0

5

10

15

20

25

9,643

12,512

15,786 14,680

20,325

Interest-Bearing Debt(in P millions)

2010 2011 2012 2013 20140

10

20

30

40

50

21,213

27,38631,972 32,407

40,362

Total Liabilities(in P millions)

2010 2011 2012 2013 2014

0

5

10

15

20

25

30

35

22.76 23.9124.93

29.49 30.82

Book Value per Share (in P)

2010 2011 2012 2013 20140

5

10

15

20

25

30

17,746 18,62319,422

25,923 26,875

Stockholder's Equity(in P millions)

2010 2011 2012 2013 2014

0

5

10

15

20

25

30

35

27,94725,735

28,984

33,378 33,544

Net Revenues(in P millions)

2010 2011 2012 2013 2014

0

5

10

15

20

17696

1479316240

19332 18880

Advertising Revenues (in P millions)

2010 2011 2012 2013 2014

0

2

4

6

8

10

8,642

6,811 6,3947,195 7,476

EBITDA (in P millions)

2010 2011 2012 2013 2014

0

1

2

3

4

5

4.21

3.15

2.13

2.68 2.87

Earnings Per Share (in P)

2010 2011 2012 2013 20140.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2,427

1,618

2,028 2,030

Net Income(in P millions)

2010 2011 2012 2013 2014

3,237
FinancialHIGHLIGHTS


0

3

6

9

12

15

10,25110,942

12,74414,046

14,664

Consumer Sales(in P millions)

2010 2011 2012 2013 2014

0

3

6

9

12

15

5,821

8,635

6,395

10,617

13,238

Cash and Cash Equivalents(in P millions)

2010 2011 2012 2013 20140

10

20

30

40

50

60

70

80

2010 2011 2012 2013 2014

38,95946,009

51,39458,330

67,237

Total Assets(in P millions)

0

5

10

15

20

25

9,643

12,512

15,786 14,680

20,325

Interest-Bearing Debt(in P millions)

2010 2011 2012 2013 20140

10

20

30

40

50

21,213

27,38631,972 32,407

40,362

Total Liabilities(in P millions)

2010 2011 2012 2013 2014

0

5

10

15

20

25

30

35

22.76 23.9124.93

29.49 30.82

Book Value per Share (in P)

2010 2011 2012 2013 20140

5

10

15

20

25

30

17,746 18,62319,422

25,923 26,875

Stockholder's Equity(in P millions)

2010 2011 2012 2013 2014

0

5

10

15

20

25

30

35

27,94725,735

28,984

33,378 33,544

Net Revenues(in P millions)

2010 2011 2012 2013 2014

0

5

10

15

20

17696

1479316240

19332 18880

Advertising Revenues (in P millions)

2010 2011 2012 2013 2014

0

2

4

6

8

10

8,642

6,811 6,3947,195 7,476

EBITDA (in P millions)

2010 2011 2012 2013 2014

0

1

2

3

4

5

4.21

3.15

2.13

2.68 2.87

Earnings Per Share (in P)

2010 2011 2012 2013 20140.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2,427

1,618

2,028 2,030

Net Income(in P millions)

2010 2011 2012 2013 2014

3,237
6-7_chairman1.indd 6-7 3/28/15 8:48 AM
6-7_chairman1.indd 6-7 3/28/15 8:48 AM
10-11_president1.indd 10-11 3/28/15 8:51 AM8-9_chairman2.indd 8-9 3/28/15 8:50 AM
8-9_chairman2.indd 8-9 3/28/15 8:50 AM
10-11_president1.indd 10-11 3/28/15 8:51 AM
Operational

Highlights

14-15_operational highlight.indd 14-15 3/28/15 8:54 AM
Operational

Highlights

14-15_operational highlight.indd 14-15 3/28/15 8:54 AM
16-17_broadcast1.indd 16-17 3/28/15 8:58 AM
16-17_broadcast1.indd 16-17 3/28/15 8:58 AM

OPERATIONAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS
ABS-CBN Annual Report 2014 31

OPERATIONAL HIGHLIGHTS
ABS-CBN Annual Report 201434


CORPORATE GOVERNANCE


CorporateGOVERNANCE

ABS-CBN recognizes the importance of corporate governance in enhancing the stakeholders interests in the Company. Its Board of Directors commits itself to the principles of good corporate governance.

The Companys principles of corporate governance are contained in its Articles of Incorporation, By-Laws, Manual of Corporate Governance, and Annual Corporate Governance Report.

Through values cascading throughout the +.#*%60%+*0$!+),*5$/% !*0%! 0$!+.!values necessary to guide its leaders and employees in formulating and making business decisions, which in the end must always remain consistent with this mission and goal of service.In 2014, the Institute of Corporate Directors (ICD), in partnership with the Securities and Exchange Commission (SEC), the Institute of Internal Auditors of the Philippines (IIA-P), and the Chartered Financial Analysts Society (CFA) recognized ABS-CBN among the Top 50 Philippine Publicly-Listed Companies %*0!.)/+"+.,+.0!#+2!.**!!+.0/$!Top 50 Publicly-Listed Companies were selected based on their policies, procedures, and practices in relation to the Association of Southeast Asian (ASEAN) Corporate Governance Scorecard (ACGS) standards on the rights and equitable treatment of shareholders, the role of stakeholders, disclosure and transparency, and the responsibilities of the board.

The Mission of theABS-CBN Board of Directors

The ABS-CBN Board of Directors (the Board) represents the stakeholders interest in pursuing a successful business, including the optimization of **%(.!01.*/$!+. /)%//%+*%/0+ !0!.)%*!that the Corporation is managed in such a way as to ensure this result while adhering to the laws and rules of the jurisdictions in which it operates, observing the highest standards of corporate governance, and observing high ethical norms. The Board establishes the overall goals, strategies, and policies of the Company. It strives to regularly )+*%0+.0$!!!0%2!*!//+")*#!)!*0/ !%/%+*/and the execution of strategies. In addition to "1(((%*#%0/+(%#0%+*/"+.%*.!/! /0+'$+( !.value, the Board has responsibility to the Companys customers, employees, suppliers, and the community.

The Board of Directors

The Board consists of 11 members, elected by shareholders during the Annual Stockholders Meeting. For the year 2014, these directors are Eugenio L. Lopez III, Chairman; Augusto Almeda-Lopez; Maria Rosario Santos-Concio; Oscar M. Lopez; Presentacion L. Psinakis; Federico R. Lopez; Federico M. Garcia, Salvador G. Tirona, Manuel M. Lopez, Antonio Jose U. Periquet, and Emmanuel S. De Dios. In compliance with the SEC requirement that at least 20% of the Board should be independent directors with no material relationship with the Company, two independent directors Mr. Periquet and Mr. de Dios were elected. These directors are independent of management, and are free of any relationship that may interfere with their judgment.

Selection of Directors

The Board itself is responsible for screening its own members and recommending them for election by the stockholders. The Chairman and Chief Executive !.$2! %.!0%*,10%*0+0$!/.!!*%*#,.+!//$!*(,,.+2(+"*+)%*!!/0+0$! %.!0+.position is determined by the full Board. In case of vacancies in the Board between annual stockholder meetings, the Board may elect directors to serve until the next annual meeting.

Mix of Directors

There is a mix of executive, non-executive, and independent directors on the Board. Senior management executives other than the Chief 4!10%2!!.00!* +. )!!0%*#/+*.!#1(.basis even if they are not members of the Board. On matters of corporate governance, while the Board assumes that decisions will be made by the impartial (previous word used is independent) directors, inputs to any policy formulation and discussions from directors who are employees of the company are welcome and expected, unless the issue involves an 01(+*%0+"%*0!.!/03%0$/1$ %.!0+./

Criteria for Independence for Independent Directors The Board assesses the independence of each director and individual nominated for election to the Board as an independent director. As part of this analysis, the Board must review and conclude whether each nominee for independent director /0%/!/0$!.!-1%.!)!*0/+"0$!.1(!/+"0$!0$!by-laws, and the Manual of Corporate Governance. Under the Manual of Corporate Governance, independent directors (i) are not directors or +!./+./1/0*0%(/0+'$+( !./+"0$!+),*5or its related companies, or any of its substantial shareholders (other than as independent directors of any of the foregoing); (ii) are not relatives of any

%.!0+.+!.+./1/0*0%(/$.!$+( !.+"0$!Company, or any of its related companies, or any of its substantial shareholders; (iii) are not acting as nominees or representatives of a substantial shareholder of the Company, or any of its related companies or any of its substantial shareholders; (iv) have not been employed in any executive capacity by the Company, or any of its related companies or by any of its substantial shareholders within the last two years; (v) are not retained as professional advisers by the Company, any of its related companies, or any of its substantial shareholders within the last two years, !%0$!.,!./+*((5+.0$.+1#$0$!%..)/2%$2!*+0engaged and do not engage in any transaction with the Company, or with any of its related companies, or with any of its substantial shareholders, whether by themselves or with other persons, or through .)+"3$%$0$!5.!,.0*!./+.+),*%!/+"which they are directors or substantial shareholders, other than transactions which are conducted at arms length and are immaterial; and (vii) do not own more than 2% of the shares of the Company and/or its related companies, or any of its substantial shareholders. Mr. Periquet and Mr. de Dios do not ,+//!//*5+"0$! %/-1(%0%+*/!*1)!.0! under Section II (5) of the Code of Corporate Governance and Section II (D) of SEC Memorandum Circular No. 16, Series of 2002.

Board Performance

The Board has regular monthly meetings, as much as possible, to review the performance of the Company and its subsidiaries, approve any pertinent plans, 1 #!0/* **%(/00!)!*0//!0#1% !(%*!/for management, and discuss any various matters requiring Board attention and approval. Any member of the Board may ask management to give special reports on and analysis of certain issues.

From January 1, 2014 to December 31, 2014, the Board had 12 meetings.

F4ABE:4A



CorporateGOVERNANCE

ABS-CBN recognizes the importance of corporate governance in enhancing the stakeholders interests in the Company. Its Board of Directors commits itself to the principles of good corporate governance.

The Companys principles of corporate governance are contained in its Articles of Incorporation, By-Laws, Manual of Corporate Governance, and Annual Corporate Governance Report.

Through values cascading throughout the +.#*%60%+*0$!+),*5$/% !*0%! 0$!+.!values necessary to guide its leaders and employees in formulating and making business decisions, which in the end must always remain consistent with this mission and goal of service.In 2014, the Institute of Corporate Directors (ICD), in partnership with the Securities and Exchange Commission (SEC), the Institute of Internal Auditors of the Philippines (IIA-P), and the Chartered Financial Analysts Society (CFA) recognized ABS-CBN among the Top 50 Philippine Publicly-Listed Companies %*0!.)/+"+.,+.0!#+2!.**!!+.0/$!Top 50 Publicly-Listed Companies were selected based on their policies, procedures, and practices in relation to the Association of Southeast Asian (ASEAN) Corporate Governance Scorecard (ACGS) standards on the rights and equitable treatment of shareholders, the role of stakeholders, disclosure and transparency, and the responsibilities of the board.

The Mission of theABS-CBN Board of Directors

The ABS-CBN Board of Directors (the Board) represents the stakeholders interest in pursuing a successful business, including the optimization of **%(.!01.*/$!+. /)%//%+*%/0+ !0!.)%*!that the Corporation is managed in such a way as to ensure this result while adhering to the laws and rules of the jurisdictions in which it operates, observing the highest standards of corporate governance, and observing high ethical norms. The Board establishes the overall goals, strategies, and policies of the Company. It strives to regularly )+*%0+.0$!!!0%2!*!//+")*#!)!*0/ !%/%+*/and the execution of strategies. In addition to "1(((%*#%0/+(%#0%+*/"+.%*.!/! /0+'$+( !.value, the Board has responsibility to the Companys customers, employees, suppliers, and the community.

The Board of Directors

The Board consists of 11 members, elected by shareholders during the Annual Stockholders Meeting. For the year 2014, these directors are Eugenio L. Lopez III, Chairman; Augusto Almeda-Lopez; Maria Rosario Santos-Concio; Oscar M. Lopez; Presentacion L. Psinakis; Federico R. Lopez; Federico M. Garcia, Salvador G. Tirona, Manuel M. Lopez, Antonio Jose U. Periquet, and Emmanuel S. De Dios. In compliance with the SEC requirement that at least 20% of the Board should be independent directors with no material relationship with the Company, two independent directors Mr. Periquet and Mr. de Dios were elected. These directors are independent of management, and are free of any relationship that may interfere with their judgment.

Selection of Directors

The Board itself is responsible for screening its own members and recommending them for election by the stockholders. The Chairman and Chief Executive !.$2! %.!0%*,10%*0+0$!/.!!*%*#,.+!//$!*(,,.+2(+"*+)%*!!/0+0$! %.!0+.position is determined by the full Board. In case of vacancies in the Board between annual stockholder meetings, the Board may elect directors to serve until the next annual meeting.

Mix of Directors

There is a mix of executive, non-executive, and independent directors on the Board. Senior management executives other than the Chief 4!10%2!!.00!* +. )!!0%*#/+*.!#1(.basis even if they are not members of the Board. On matters of corporate governance, while the Board assumes that decisions will be made by the impartial (previous word used is independent) directors, inputs to any policy formulation and discussions from directors who are employees of the company are welcome and expected, unless the issue involves an 01(+*%0+"%*0!.!/03%0$/1$ %.!0+./

Criteria for Independence for Independent Directors The Board assesses the independence of each director and individual nominated for election to the Board as an independent director. As part of this analysis, the Board must review and conclude whether each nominee for independent director /0%/!/0$!.!-1%.!)!*0/+"0$!.1(!/+"0$!0$!by-laws, and the Manual of Corporate Governance. Under the Manual of Corporate Governance, independent directors (i) are not directors or +!./+./1/0*0%(/0+'$+( !./+"0$!+),*5or its related companies, or any of its substantial shareholders (other than as independent directors of any of the foregoing); (ii) are not relatives of any

%.!0+.+!.+./1/0*0%(/$.!$+( !.+"0$!Company, or any of its related companies, or any of its substantial shareholders; (iii) are not acting as nominees or representatives of a substantial shareholder of the Company, or any of its related companies or any of its substantial shareholders; (iv) have not been employed in any executive capacity by the Company, or any of its related companies or by any of its substantial shareholders within the last two years; (v) are not retained as professional advisers by the Company, any of its related companies, or any of its substantial shareholders within the last two years, !%0$!.,!./+*((5+.0$.+1#$0$!%..)/2%$2!*+0engaged and do not engage in any transaction with the Company, or with any of its related companies, or with any of its substantial shareholders, whether by themselves or with other persons, or through .)+"3$%$0$!5.!,.0*!./+.+),*%!/+"which they are directors or substantial shareholders, other than transactions which are conducted at arms length and are immaterial; and (vii) do not own more than 2% of the shares of the Company and/or its related companies, or any of its substantial shareholders. Mr. Periquet and Mr. de Dios do not ,+//!//*5+"0$! %/-1(%0%+*/!*1)!.0! under Section II (5) of the Code of Corporate Governance and Section II (D) of SEC Memorandum Circular No. 16, Series of 2002.

Board Performance

The Board has regular monthly meetings, as much as possible, to review the performance of the Company and its subsidiaries, approve any pertinent plans, 1 #!0/* **%(/00!)!*0//!0#1% !(%*!/for management, and discuss any various matters requiring Board attention and approval. Any member of the Board may ask management to give special reports on and analysis of certain issues.

From January 1, 2014 to December 31, 2014, the Board had 12 meetings.

F4ABE:4A

CORPORATE GOVERNANCE CORPORATE GOVERNANCE

the replacement planning table of the organization, * % !*0%!//1!//+./* #,/%*/1!//%+*/3!((/*5)!/1.!/*!! ! 0+((/1$#,/0is composed of Salvador Tirona, Augusto Almeda-Lopez, and Emmanuel De Dios. Randolf David and Carlo Katigbak are advisors.

The Compensation Committee for the Chairman and 0$!$%!"4!10%2!!..!2%!3/* ,,.+2!/the recommended changes concerning the salaries * !*!0/,.+2% ! 0+0$!+),*5/$!committee is composed of Augusto Almeda-Lopez, Federico Garcia, and Antonio Jose U. Periquet. Mario Bautista is an advisor.

The Audit and Compliance Committee reviews the **%(.!,+.0/* .%/'/!4)%*!/%*0!.*(+*0.+(systems, oversees the audit process as well as the companys compliance with laws, and evaluates the companys business conduct. It is composed of Antonio Jose Periquet, Salvador Tirona, and Emmanuel De Dios. Carlo Katigbak is an advisor.

The Risk Management Committee oversees the formulation and establishment of an enterprise-wide risk management system, including the review, analysis, and recommendation of policies, frameworks, strategies, and systems to be used by the Company to manage risks, threats, and liabilities. It is composed of Salvador Tirona, Federico Garcia, and Emmanuel De Dios.

The Nomination and Election Committee reviews and !2(10!/0$!-1(%0%+*/+"((,!./+*/*+)%*0! to the Board and other appointments that require +. ,,.+2(* //!//!/0$!!!0%2!*!//+"0$!Boards processes and procedures in the election or replacement of directors. It is composed of Eugenio Lopez III, Ma. Rosario Santos-Concio, and Antonio Jose Periquet. Randolf David is an advisor.

B@C?

CORPORATE GOVERNANCE CORPORATE GOVERNANCE

the replacement planning table of the organization, * % !*0%!//1!//+./* #,/%*/1!//%+*/3!((/*5)!/1.!/*!! ! 0+((/1$#,/0is composed of Salvador Tirona, Augusto Almeda-Lopez, and Emmanuel De Dios. Randolf David and Carlo Katigbak are advisors.

The Compensation Committee for the Chairman and 0$!$%!"4!10%2!!..!2%!3/* ,,.+2!/the recommended changes concerning the salaries * !*!0/,.+2% ! 0+0$!+),*5/$!committee is composed of Augusto Almeda-Lopez, Federico Garcia, and Antonio Jose U. Periquet. Mario Bautista is an advisor.

The Audit and Compliance Committee reviews the **%(.!,+.0/* .%/'/!4)%*!/%*0!.*(+*0.+(systems, oversees the audit process as well as the companys compliance with laws, and evaluates the companys business conduct. It is composed of Antonio Jose Periquet, Salvador Tirona, and Emmanuel De Dios. Carlo Katigbak is an advisor.

The Risk Management Committee oversees the formulation and establishment of an enterprise-wide risk management system, including the review, analysis, and recommendation of policies, frameworks, strategies, and systems to be used by the Company to manage risks, threats, and liabilities. It is composed of Salvador Tirona, Federico Garcia, and Emmanuel De Dios.

The Nomination and Election Committee reviews and !2(10!/0$!-1(%0%+*/+"((,!./+*/*+)%*0! to the Board and other appointments that require +. ,,.+2(* //!//!/0$!!!0%2!*!//+"0$!Boards processes and procedures in the election or replacement of directors. It is composed of Eugenio Lopez III, Ma. Rosario Santos-Concio, and Antonio Jose Periquet. Randolf David is an advisor.

B@C?
Consolidated RevenuesFor the year ended December 31, 2014, ABS-CBN generated consolidated revenues of P33.544 billion from advertising and consumer sales, P166 million or 0.5% growth year-on-year. Removing the impact of election-related revenues, consolidated revenues grew by 4.5%.

Advertising revenues decreased by P452 million or 2.3% year-on-year. Excluding election-related advertisements, it was up by 4.6% compared with previous year attributable to rate increase implemented during the year.

On the other hand, consumer sales improved by 4.4% resulting from strong performance of movies released both locally and internationally supported by performance of Sky Cable.

Comparative revenue mix was as follows:

*Excluding election related revenues

____________________________

to establish and implement an integrated risk management framework that covers all aspects of risk across the Companys organization, and improve the Companys risk management readiness. The Companys corporate strategy formulation and business decision-making processes always take into account potential risks and the steps and costs necessary to minimize, if not eliminate, such risks. As part of its stewardship responsibility and commitment to deliver optimum value to its stakeholders, ABS-CBN ensures that it has the proper control systems in place, and to the extent possible, adopted global best practices, to identify and assess, analyze and mitigate market, operating,

systems is currently being undertaken. The Company

to assist in the development of an ERM Framework and Program.

Disclosures and Financial Reporting

Philippine Accounting Standards and Philippine Financial Reporting Standards that in turn conform with International Accounting Standards.

of operations of the businesses of ABS-CBN and

detailed information on the total assets, total liabilities and shareholders equity, revenues, costs and expenses, operating income and income before tax, net income attributable to shareholders of ABS-CBN and minority interest, earnings per share, and EBITDA.

Business segment information is likewise provided for major business categories and includes information such as revenues, operating and net income, assets and liabilities, capital expenditures and depreciation and amortization expenses.

Dealings in Securities

ABS-CBN requires all members of the Board

purchase, sale or change in their shareholdings of the Companys common shares or Philippine Depositary

the PSEs requirement for such disclosure.

Shareholder and Investor Relations

ABS-CBN fully respects shareholder rights and complies with regulatory and legal requirements that enforce and ensure that such rights are respected. These requirements include due and proper

adequate, transparent and timely information due shareholders.

As a publicly listed corporation, ABS-CBN is subject to reporting requirements prescribed by regulatory authorities, including the SEC and the PSE, among others. ABS-CBN is compliant in submitting timely structured and non-structured reports and disclosure

To complement these disclosures, ABS-CBNs Investor Relations group also holds regular analyst

and annual report submissions that further explain, elaborate on and contextualize the Companys

of Treasury, and the Head of Investor Relations are always present at these investor, analyst and press

results.

of Treasury , and its Head of Investor Relations, meet with representatives of institutional investors and investment funds upon request and at various investor conferences throughout the year for more intimate and detailed discussions about the

results, business prospects and long-term plans. Inquiries from institutional and individual investors received by regular or electronic mail are also duly acknowledged and addressed in a timely and transparent manner.

ABS-CBN maintains an investor relations website that contains information on the history and businesses of the company, its Board of Directors and

the PSE, share price performance and dividend history, and investor relations contact information.

ABS-CBNs Investor Relations website may be found on http://ir.abs-cbn.com

MANAGEMENTS DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of ABS-CBN Corporation and Subsidiaries (ABS-CBN or

ended December 31, 2014 and 2013.

All values are presented in Philippine Peso and are rounded to the nearest thousand, except when otherwise indicated.

FOR THE YEAR ENDED DECEMBER 31, 2014

The table below summarizes the results of operations for the years 2014 and 2013.

Consolidated Costs and ExpensesDirect costs and expenses amounted to P30.369 billion, or a 0.2% increase year-on-year.

Production costs declined by P491 million or 4.3% to P11.008 billion. Personnel expenses and talent fees which comprised the 55.1% of total production costs was down by 5.9% year-on-year. Through Companys continuous cost reduction initiatives, growth of other cash expenses was controlled at 0.6%. An 8.3% decline in noncash expenses such as depreciation and program rights amortization also contributed to said reduction.

Cost of sales and services increased by P63 million or 0.7% to P9.247 billion. In line with the increase in Sky Cables number of subscribers coupled with foreign exchange losses, programming, bandwidth costs and contracted services increased compared to prior year. Similarly, due to the increasing number of movies shown and events mounted overseas, Globals corresponding theatrical and event costs grew as well.

GAEX grew by P499 million or 5.2%. Personnel expenses, which represent 50.9% of total GAEX, increased by 10.5% attributable to annual merit increase. Controlled spending in GAEX resulted to 3.2% decrease in other cash expenses though noncash expenses such as depreciation and provision for doubtful accounts grew by 14.6%.

Net Income and EBITDAThe Company generated P2.030 billion net income for the year. Net income increased by 0.1% compared to P2.028 billion in previous year. EBITDA reached P7.476 billion, a 3.9% improvement year-on-year. Excluding the election-related revenues and expenses in 2013, net income and EBITDA posted an increase of 42.0% and 17.9%, respectively.

Business SegmentsFor management purposes, the Company categorizes its operations into the following reportable businesses: TV and Studio, Pay TV Networks and New Businesses. This segmentation is the basis upon which the Company measures its business operations.

2014 2013 2013*Advertising revenues 56% 58% 56%Consumer sales 44% 42% 44%

Consolidated Revenues P33,544 P33,378 P166 0.5Advertising Revenues 18,880 19,332 (452) -2.3Consumer Sales 14,664 14,046 618 4.4

Sale of Services 14,030 13,287 743 5.6Sale of Goods 352 579 (227) -39.2Others 282 180 102 56.7

Costs and Expenses 30,369 30,298 71 0.2Production Costs 11,008 11,499 (491) -4.3Cost of Sales and Services 9,247 9,184 63 0.7General and Administrative Expenses (GAEX) 10,114 9,615 499 5.2

Financial Costs net 1,043 868 175 20.2Equity in Net Loss (Earnings) of

Associates and Joint Ventures (3) 12 (15) -125.0Other Income net (652) (512) (140) 27.3Net Income P2,030 P2,028 P2 0.1EBITDA P7,476 P7,195 P281 3.9

2014 2013VARIANCE

AMOUNT %


FinancialREVIEW



72-73_corp governance_financial preview.indd 72-73 3/28/15 10:11 AM
Consolidated RevenuesFor the year ended December 31, 2014, ABS-CBN generated consolidated revenues of P33.544 billion from advertising and consumer sales, P166 million or 0.5% growth year-on-year. Removing the impact of election-related revenues, consolidated revenues grew by 4.5%.

Advertising revenues decreased by P452 million or 2.3% year-on-year. Excluding election-related advertisements, it was up by 4.6% compared with previous year attributable to rate increase implemented during the year.

On the other hand, consumer sales improved by 4.4% resulting from strong performance of movies released both locally and internationally supported by performance of Sky Cable.

Comparative revenue mix was as follows:

*Excluding election related revenues

____________________________

to establish and implement an integrated risk management framework that covers all aspects of risk across the Companys organization, and improve the Companys risk management readiness. The Companys corporate strategy formulation and business decision-making processes always take into account potential risks and the steps and costs necessary to minimize, if not eliminate, such risks. As part of its stewardship responsibility and commitment to deliver optimum value to its stakeholders, ABS-CBN ensures that it has the proper control systems in place, and to the extent possible, adopted global best practices, to identify and assess, analyze and mitigate market, operating,

systems is currently being undertaken. The Company

to assist in the development of an ERM Framework and Program.

Disclosures and Financial Reporting

Philippine Accounting Standards and Philippine Financial Reporting Standards that in turn conform with International Accounting Standards.

of operations of the businesses of ABS-CBN and

detailed information on the total assets, total liabilities and shareholders equity, revenues, costs and expenses, operating income and income before tax, net income attributable to shareholders of ABS-CBN and minority interest, earnings per share, and EBITDA.

Business segment information is likewise provided for major business categories and includes information such as revenues, operating and net income, assets and liabilities, capital expenditures and depreciation and amortization expenses.

Dealings in Securities

ABS-CBN requires all members of the Board

purchase, sale or change in their shareholdings of the Companys common shares or Philippine Depositary

the PSEs requirement for such disclosure.

Shareholder and Investor Relations

ABS-CBN fully respects shareholder rights and complies with regulatory and legal requirements that enforce and ensure that such rights are respected. These requirements include due and proper

adequate, transparent and timely information due shareholders.

As a publicly listed corporation, ABS-CBN is subject to reporting requirements prescribed by regulatory authorities, including the SEC and the PSE, among others. ABS-CBN is compliant in submitting timely structured and non-structured reports and disclosure

To complement these disclosures, ABS-CBNs Investor Relations group also holds regular analyst

and annual report submissions that further explain, elaborate on and contextualize the Companys

of Treasury, and the Head of Investor Relations are always present at these investor, analyst and press

results.

of Treasury , and its Head of Investor Relations, meet with representatives of institutional investors and investment funds upon request and at various investor conferences throughout the year for more intimate and detailed discussions about the

results, business prospects and long-term plans. Inquiries from institutional and individual investors received by regular or electronic mail are also duly acknowledged and addressed in a timely and transparent manner.

ABS-CBN maintains an investor relations website that contains information on the history and businesses of the company, its Board of Directors and

the PSE, share price performance and dividend history, and investor relations contact information.

ABS-CBNs Investor Relations website may be found on http://ir.abs-cbn.com

MANAGEMENTS DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of ABS-CBN Corporation and Subsidiaries (ABS-CBN or

ended December 31, 2014 and 2013.

All values are presented in Philippine Peso and are rounded to the nearest thousand, except when otherwise indicated.

FOR THE YEAR ENDED DECEMBER 31, 2014

The table below summarizes the results of operations for the years 2014 and 2013.

Consolidated Costs and ExpensesDirect costs and expenses amounted to P30.369 billion, or a 0.2% increase year-on-year.

Production costs declined by P491 million or 4.3% to P11.008 billion. Personnel expenses and talent fees which comprised the 55.1% of total production costs was down by 5.9% year-on-year. Through Companys continuous cost reduction initiatives, growth of other cash expenses was controlled at 0.6%. An 8.3% decline in noncash expenses such as depreciation and program rights amortization also contributed to said reduction.

Cost of sales and services increased by P63 million or 0.7% to P9.247 billion. In line with the increase in Sky Cables number of subscribers coupled with foreign exchange losses, programming, bandwidth costs and contracted services increased compared to prior year. Similarly, due to the increasing number of movies shown and events mounted overseas, Globals corresponding theatrical and event costs grew as well.

GAEX grew by P499 million or 5.2%. Personnel expenses, which represent 50.9% of total GAEX, increased by 10.5% attributable to annual merit increase. Controlled spending in GAEX resulted to 3.2% decrease in other cash expenses though noncash expenses such as depreciation and provision for doubtful accounts grew by 14.6%.

Net Income and EBITDAThe Company generated P2.030 billion net income for the year. Net income increased by 0.1% compared to P2.028 billion in previous year. EBITDA reached P7.476 billion, a 3.9% improvement year-on-year. Excluding the election-related revenues and expenses in 2013, net income and EBITDA posted an increase of 42.0% and 17.9%, respectively.

Business SegmentsFor management purposes, the Company categorizes its operations into the following reportable businesses: TV and Studio, Pay TV Networks and New Businesses. This segmentation is the basis upon which the Company measures its business operations.

2014 2013 2013*Advertising revenues 56% 58% 56%Consumer sales 44% 42% 44%

Consolidated Revenues P33,544 P33,378 P166 0.5Advertising Revenues 18,880 19,332 (452) -2.3Consumer Sales 14,664 14,046 618 4.4

Sale of Services 14,030 13,287 743 5.6Sale of Goods 352 579 (227) -39.2Others 282 180 102 56.7

Costs and Expenses 30,369 30,298 71 0.2Production Costs 11,008 11,499 (491) -4.3Cost of Sales and Services 9,247 9,184 63 0.7General and Administrative Expenses (GAEX) 10,114 9,615 499 5.2

Financial Costs net 1,043 868 175 20.2Equity in Net Loss (Earnings) of

Associates and Joint Ventures (3) 12 (15) -125.0Other Income net (652) (512) (140) 27.3Net Income P2,030 P2,028 P2 0.1EBITDA P7,476 P7,195 P281 3.9

2014 2013VARIANCE

AMOUNT %


FinancialREVIEW



72-73_corp governance_financial preview.indd 72-73 3/28/15 10:11 AM

Financial REVIEW Financial REVIEW

The following analysis presents results of operations of the Companys business segments for the period December 31, 2014 and 2013:

A.TV and Studio

TV and Studio segment results for the year are as follows:

BroadcastRevenues from the broadcast business grew by P233 million or 1.3% year-on-year. Excluding the impact of election-related revenues, recurring revenues grew by 9.2%. Growth was fuelled by ABS-CBNs strength in content creation and programming which led to ratings leadership. Channel 2 continue to lead in audience share capturing 49% share nationwide for primetime and 44% audience share for national total day, based on Kantar National TV Audience Measurement. Moreover, the top 10 programs in the Philippines were dominated by ABS-CBN:

Direct costs associated to broadcast operations decreased by 5.3% or P593 million due to implementation of the following cost reduction initiatives: launching of new talents, process !%!*5.!2%!3%*0!#.0%+*+"/!.2%!/* centralization.

GlobalAs of December 31, 2014, ABS-CBN Global had over 2.8 million viewers in over 40 countries across 4 continents worldwide, 2% higher than previous year.

2014 2013 % 2014 2013 % Broadcast P17,976 P17,743 1.3 P10,495 P11,088 -5.3Global 5,651 5,527 2.2 3,399 3,341 1.7Films and Music 1,355 1,158 17.0 598 586 2.0Narrowcast and Sports 1,878 1,883 -0.3 1,342 1,434 -6.4Others 1,457 1,540 -5.4 187 424 -55.9

P28,317 P 27,851 1.7 P16,021 P16,873 -5.0

REVENUES DIRECT COSTS

Forty two percent (42%) of Global viewers were in North America while 40% were in the Middle East.

Globals primary revenue drivers were as follows:

Total revenue of Global grew by 2.2% year-on-year.

Subscription revenues were down by P166 million or 4.6% year-on-year. Despite the increase in total subscriber count of 2%, lower subscription revenue from the Middle East caused by migration initiatives +/!00$!#.+30$".+)+0$!..!#%+*/

Major events such as ASAP in Dubai, OK Go and ASAP in Los Angeles fuelled the 17.6% in advertising revenues and contributed to 21.6 % growth in revenue from events.

Theatrical revenues grew by P47 million driven by the success of international screenings of the Girl Boy Bakla Tomboy, Bride for Rent, Starting Over Again, Maybe This Time, Shes Dating The Gangster and The Trial. Total gross revenues from theatrical grew by 13.5% year-on-year assisted by shorter window between local and international releases of the movies. Global screened 12 movies across its regions this year compared to 8 in 2013.

Remittance revenue declined by P39 million caused by reduction in volume as a result of changes of business tie-ups.

Cost of sales and services of Global operations increased by 1.7%. The higher cost was attributable to theatrical costs related to movies shown overseas and costs of mounted events. Cost related to anti-piracy campaign also contributed to said increase.

Films and MusicTotal revenue of Films and Music grew by more than P197 million or 17.0% year-on-year. Star Cinema .!(!/! * %/0.%10! ()/ 1.%*#0$!5!.Girl Boy Bakla Tomboy (P421 million) breached the P400M mark. Bride for Rent (P323 million) and Starting Over Again (P390 million) topped P300 )%((%+*+4+!.!!%,0/$!/0%*#0$!*#/0!.posted P251 million gross receipts and another three generated more than P100 million gross receipts Pagpag (P177 million), Da Possessed (P119 million) and Maybe This Time (P127 million). Considering both local and foreign movies, Starting Over Again was the

2nd top grossing movie next to The Amazing Spider Man (P447 million). It was also the highest grossing movie among all the international releases of the +),*55((!#(%"!3/0$!./0'5(%#$0)+2%!that posted more than P80 million gross receipts.

The Company also mounted successful concerts - DOS The Daniel Padilla Concert and La nightingale by Lani Misalucha.

Cost of sales and services grew by 2% corresponding 0+%*.!/!+"-1(%05,.+ 1! ()/

Narrowcast and Sports+0(.!2!*1!/+"*..+3/0* /,+.0/3/0compared to last year. The Company was able to maintain its revenue from subscription business along with advertising revenues. Subscription revenue was fuelled by Cinema One while UAAP, +.( 1,* *!3+*0!*0+!.%*#/contributed to advertising revenues.

+/1/0%*/+1* #.+//,.+0).#%*/)*#!)!*0controlled its cost of sales and services which was down 6.4%.

B. Pay TV Networks

Total revenues grew by P827 million or 11.9% year-on year. Broadband revenues increased by 36.6% driven by 24% growth in subscriber base while cable revenues also grew by 7.5% driven as well by 2% growth in subscriber count and the rate increase implemented during the year.

Direct costs increased by P530 million to P5.014 billion. The increase was caused by growth in programming and bandwidth costs of 15% and 47%, respectively. Increase in bandwidth costs was due to improvement made in our products and services to match market competition.

C. New Business

The Implementing Rules and Regulation was released last December 17, 2014. Consequently, the Company launched commercially the DTT in February 2015. The Company continues to invest in DTT equipment to improve clarity of signal in certain areas of Mega Manila and Central Luzon. The Company believes that the transition from analogue to digital will result in an increase in its audience share.

Total activations of ABS-CBNmobile as of December 31, 2014 reached over 1.5 million. Partnership with Kakao, Huawei and Cloudfone commenced during the year. ABS-C continue to create exclusive contents for its subscribers.

On the other hand, A CJ O generated average monthly sales of P35 million compared with P16 million per month last year when it started.

Capital Expenditures

Cash capital expenditures and program rights acquisitions amounted to P4.992 billion as of December 31, 2014. Program rights acquisitions amounted to P2.294 billion. Investments in Pay TV facilities reached P2.3 billion.

For 2015, ABS-CBN expects to invest approximately P8.3 billion for capital expenditure and acquisition of ()* ,.+#.).%#$0/$%/"1* %*#.!-1%.!)!*03%((!**! 50$!,.+!! /+"0$!+* issuance as well as from internally generated funds.

Statement of Financial Position Accounts

As at December 31, 2014, total consolidated assets stood at P67.237 billion, 15.3% higher than total assets of P58.330 billion as of December 31, 2013. Cash and cash equivalents of P13.238 billion is 24.7% higher than the December 31, 2013 balance. The increase in cash was due primarily to the P6.0 billion loan. Consequently, total interest-bearing loans grew by 38.5% at P20.325 billion. Trade accounts receivables amounting to P9.764 billion was 14.2% higher than at the end of 2013. Shareholders equity stood at P26.875 billion as of December 31, 2014. Increase attributable to net %*+)!!.*! 1.%*#0$!5!.3/+/!05!!0of declaration of cash dividends for both common and preferred shareholders.

The Companys net debt-to-equity ratio was at 0.26x and 0.16x as of December 31, 2014 and December 31, 2013, respectively.

____________________________

!(//%0%+*/3!.!) !%*1 %0! #1.!/for comparative purposes

*Source: Kantar Media TV Audience Measurement - Total Homes, January - December 2014

Subscription P3,475 P3,641 -4.6Advertising Revenue 581 494 17.6Theatrical and Events 467 384 21.6Remittance 305 344 -11.3Others 823 664 23.9

P5,651 P5,527 2.2%

2014 2013 %REVENUES

2014 2013 %REVENUES

Cable P5,661 P5,266 7.5Broadband 1,264 925 36.6Advertising Revenue and Others 839 746 12.5

P7,764 P6,937 11.9

1 ABS-CBN The Voice Kids Sunday 34.9 Weekend2 ABS-CBN The Voice Kids Saturday 34.0 Weekend

GMA-7 Pacquiao vs. Algieri 34.0 Weekend3 ABS-CBN Honesto 31.7 Weekday4 ABS-CBN Mars Ravelos Dyesebel 30.1 Weekday5 ABS-CBN Boses ng Bulilit Kami Ulit! 28.9 Weekend6 ABS-CBN Ikaw Lamang 28.4 Weekday7 ABS-CBN Got to Believe 28.3 Weekday8 ABS-CBN Hawak Kamay 28.1 Weekday9 ABS-CBN MMK Ang Tahanan Mo 28.0 Weekend

The Voice of PH 28.0 Weekend10 ABS-CBN PBB All In Big Night 27.9 Weekend

RANK CHANNEL PROGRAM RATING (%)*

Financial REVIEW Financial REVIEW

The following analysis presents results of operations of the Companys business segments for the period December 31, 2014 and 2013:

A.TV and Studio

TV and Studio segment results for the year are as follows:

BroadcastRevenues from the broadcast business grew by P233 million or 1.3% year-on-year. Excluding the impact of election-related revenues, recurring revenues grew by 9.2%. Growth was fuelled by ABS-CBNs strength in content creation and programming which led to ratings leadership. Channel 2 continue to lead in audience share capturing 49% share nationwide for primetime and 44% audience share for national total day, based on Kantar National TV Audience Measurement. Moreover, the top 10 programs in the Philippines were dominated by ABS-CBN:

Direct costs associated to broadcast operations decreased by 5.3% or P593 million due to implementation of the following cost reduction initiatives: launching of new talents, process !%!*5.!2%!3%*0!#.0%+*+"/!.2%!/* centralization.

GlobalAs of December 31, 2014, ABS-CBN Global had over 2.8 million viewers in over 40 countries across 4 continents worldwide, 2% higher than previous year.

2014 2013 % 2014 2013 % Broadcast P17,976 P17,743 1.3 P10,495 P11,088 -5.3Global 5,651 5,527 2.2 3,399 3,341 1.7Films and Music 1,355 1,158 17.0 598 586 2.0Narrowcast and Sports 1,878 1,883 -0.3 1,342 1,434 -6.4Others 1,457 1,540 -5.4 187 424 -55.9

P28,317 P 27,851 1.7 P16,021 P16,873 -5.0

REVENUES DIRECT COSTS

Forty two percent (42%) of Global viewers were in North America while 40% were in the Middle East.

Globals primary revenue drivers were as follows:

Total revenue of Global grew by 2.2% year-on-year.

Subscription revenues were down by P166 million or 4.6% year-on-year. Despite the increase in total subscriber count of 2%, lower subscription revenue from the Middle East caused by migration initiatives +/!00$!#.+30$".+)+0$!..!#%+*/

Major events such as ASAP in Dubai, OK Go and ASAP in Los Angeles fuelled the 17.6% in advertising revenues and contributed to 21.6 % growth in revenue from events.

Theatrical revenues grew by P47 million driven by the success of international screenings of the Girl Boy Bakla Tomboy, Bride for Rent, Starting Over Again, Maybe This Time, Shes Dating The Gangster and The Trial. Total gross revenues from theatrical grew by 13.5% year-on-year assisted by shorter window between local and international releases of the movies. Global screened 12 movies across its regions this year compared to 8 in 2013.

Remittance revenue declined by P39 million caused by reduction in volume as a result of changes of business tie-ups.

Cost of sales and services of Global operations increased by 1.7%. The higher cost was attributable to theatrical costs related to movies shown overseas and costs of mounted events. Cost related to anti-piracy campaign also contributed to said increase.

Films and MusicTotal revenue of Films and Music grew by more than P197 million or 17.0% year-on-year. Star Cinema .!(!/! * %/0.%10! ()/ 1.%*#0$!5!.Girl Boy Bakla Tomboy (P421 million) breached the P400M mark. Bride for Rent (P323 million) and Starting Over Again (P390 million) topped P300 )%((%+*+4+!.!!%,0/$!/0%*#0$!*#/0!.posted P251 million gross receipts and another three generated more than P100 million gross receipts Pagpag (P177 million), Da Possessed (P119 million) and Maybe This Time (P127 million). Considering both local and foreign movies, Starting Over Again was the

2nd top grossing movie next to The Amazing Spider Man (P447 million). It was also the highest grossing movie among all the international releases of the +),*55((!#(%"!3/0$!./0'5(%#$0)+2%!that posted more than P80 million gross receipts.

The Company also mounted successful concerts - DOS The Daniel Padilla Concert and La nightingale by Lani Misalucha.

Cost of sales and services grew by 2% corresponding 0+%*.!/!+"-1(%05,.+ 1! ()/

Narrowcast and Sports+0(.!2!*1!/+"*..+3/0* /,+.0/3/0compared to last year. The Company was able to maintain its revenue from subscription business along with advertising revenues. Subscription revenue was fuelled by Cinema One while UAAP, +.( 1,* *!3+*0!*0+!.%*#/contributed to advertising revenues.

+/1/0%*/+1* #.+//,.+0).#%*/)*#!)!*0controlled its cost of sales and services which was down 6.4%.

B. Pay TV Networks

Total revenues grew by P827 million or 11.9% year-on year. Broadband revenues increased by 36.6% driven by 24% growth in subscriber base while cable revenues also grew by 7.5% driven as well by 2% growth in subscriber count and the rate increase implemented during the year.

Direct costs increased by P530 million to P5.014 billion. The increase was caused by growth in programming and bandwidth costs of 15% and 47%, respectively. Increase in bandwidth costs was due to improvement made in our products and services to match market competition.

C. New Business

The Implementing Rules and Regulation was released last December 17, 2014. Consequently, the Company launched commercially the DTT in February 2015. The Company continues to invest in DTT equipment to improve clarity of signal in certain areas of Mega Manila and Central Luzon. The Company believes that the transition from analogue to digital will result in an increase in its audience share.

Total activations of ABS-CBNmobile as of December 31, 2014 reached over 1.5 million. Partnership with Kakao, Huawei and Cloudfone commenced during the year. ABS-C continue to create exclusive contents for its subscribers.

On the other hand, A CJ O generated average monthly sales of P35 million compared with P16 million per month last year when it started.

Capital Expenditures

Cash capital expenditures and program rights acquisitions amounted to P4.992 billion as of December 31, 2014. Program rights acquisitions amounted to P2.294 billion. Investments in Pay TV facilities reached P2.3 billion.

For 2015, ABS-CBN expects to invest approximately P8.3 billion for capital expenditure and acquisition of ()* ,.+#.).%#$0/$%/"1* %*#.!-1%.!)!*03%((!**! 50$!,.+!! /+"0$!+* issuance as well as from internally generated funds.

Statement of Financial Position Accounts

As at December 31, 2014, total consolidated assets stood at P67.237 billion, 15.3% higher than total assets of P58.330 billion as of December 31, 2013. Cash and cash equivalents of P13.238 billion is 24.7% higher than the December 31, 2013 balance. The increase in cash was due primarily to the P6.0 billion loan. Consequently, total interest-bearing loans grew by 38.5% at P20.325 billion. Trade accounts receivables amounting to P9.764 billion was 14.2% higher than at the end of 2013. Shareholders equity stood at P26.875 billion as of December 31, 2014. Increase attributable to net %*+)!!.*! 1.%*#0$!5!.3/+/!05!!0of declaration of cash dividends for both common and preferred shareholders.

The Companys net debt-to-equity ratio was at 0.26x and 0.16x as of December 31, 2014 and December 31, 2013, respectively.

____________________________

!(//%0%+*/3!.!) !%*1 %0! #1.!/for comparative purposes

*Source: Kantar Media TV Audience Measurement - Total Homes, January - December 2014

Subscription P3,475 P3,641 -4.6Advertising Revenue 581 494 17.6Theatrical and Events 467 384 21.6Remittance 305 344 -11.3Others 823 664 23.9

P5,651 P5,527 2.2%

2014 2013 %REVENUES

2014 2013 %REVENUES

Cable P5,661 P5,266 7.5Broadband 1,264 925 36.6Advertising Revenue and Others 839 746 12.5

P7,764 P6,937 11.9

1 ABS-CBN The Voice Kids Sunday 34.9 Weekend2 ABS-CBN The Voice Kids Saturday 34.0 Weekend

GMA-7 Pacquiao vs. Algieri 34.0 Weekend3 ABS-CBN Honesto 31.7 Weekday4 ABS-CBN Mars Ravelos Dyesebel 30.1 Weekday5 ABS-CBN Boses ng Bulilit Kami Ulit! 28.9 Weekend6 ABS-CBN Ikaw Lamang 28.4 Weekday7 ABS-CBN Got to Believe 28.3 Weekday8 ABS-CBN Hawak Kamay 28.1 Weekday9 ABS-CBN MMK Ang Tahanan Mo 28.0 Weekend

The Voice of PH 28.0 Weekend10 ABS-CBN PBB All In Big Night 27.9 Weekend

RANK CHANNEL PROGRAM RATING (%)*

Statements of Management's

Responsibility for Financial

STATEMENTSReport of the Audit

COMMITTEE

STATEMENT OF MANAGEMENT'S RESPONSIBILITYFOR FINANCIAL STATEMENTS

The management of ABS-CBN Corporation and Subsidiaries is responsible for the preparation * "%.,.!/!*00%+*+"0$!+*/+(% 0! **%(/00!)!*0//+"* "+.0$!5!./!* ! December 31, 2014 and 2013 and January 1, 2013, including the additional components attached therein, in accordance with Philippine Financial Reporting Standards. This responsibility includes designing and implementing internal controls relevant to the preparation and fair presentation of +*/+(% 0! **%(/00!)!*0/0$0.!".!!".+))0!.%()%//00!)!*03$!0$!. 1!0+".1 or error, selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

$!+. +"%.!0+./.!2%!3/* ,,.+2!/0$!+*/+(% 0! **%(/00!)!*0/* /1)%0/the same to the stockholders.

SyCip Gorres Velayo & Co., the independent auditors, appointed by the stockholders has examined 0$!+*/+(% 0! **%(/00!)!*0/+"0$!+),*5%*+. *!3%0$$%(%,,%*!0* . /on Auditing, and in its report to the stockholders, has expressed its opinion on the fairness of presentation upon completion of such examination.

Eugenio L. Lopez III Ma. Rosario N. Santos-Concio$%.)*+"0$!+. .!/% !*0* $%!"4!10%2!!.

Rolando P. Valdueza Aldrin M. Cerrado.+1,$%!"%**%(!. $%!"%**%(!.

ABS-CBN BROADCAST CENTER, SGT. E.A. ESGUERRA AVENUE COR. MOTHER IGNACIA ST., QUEZON CITY, PHILIPPINESTEL. NOS.: (632) 924-4101 | (632) 415-2272

ABS-CBN CORPORATION Report of the Audit Committee for the Year Ended December 31, 2014

To The Board of Directors:

$!1 %0+))%00!!%*"1((()!*0+"%0/+2!./%#$0.!/,+*/%%(%0%!/.!,.!/!*0/* //%/0/0$!Board by looking at the:

!/+*(!*!//+"0$!+),*5/**%(/00!)!*0* !%!*5+"0$!**%( reporting process; !(%%(%05+"0$!%*0!.*(+*0.+(!*2%.+*)!*0 &!0%2%05%* !,!* !*!* !!0%2!*!//+"%*0!.*(1 %0"1*0%+*/* ,.+!// 1(%0%+*/%* !,!* !*!* "!!/+"0$!+),*5/!40!.*(1 %0+./3%0$.!#. 0+ 0$!**1(.!2%!3+"0$!+),*5/**%(/00!)!*0/* +),*5/+),(%*!3%0$(!#(* .!#1(0+.5.!-1%.!)!*0/

The role and responsibilities of the Audit Committee are embodied in an Audit Committee Charter. ++),(53%0$0$!/% $.0!.0$!1 %0+))%00!!+*.)/0$0

$!)&+.%05+"0$!1 %0+))%00!!.!%* !,!* !*0 %.!0+./%*(1 %*#0$!$%.)* 1.0!.(5)!!0%*#3!.!$!( * 00!* ! 50$!$%.)** )!)!./+"0$! Committee; $!+))%00!!.!2%!3! * ,,.+2! %*0!.*(1 %0/+,!* ,(*//3!((/0$! manpower resources and competencies necessary to carry out the audit plan; $!+))%00!!.!2%!3! * %/1//! 0$!.!,+.0/+"0$!%*0!.*(1 %0+./%*(1 %*# necessary corrective actions, with concerned management and the internal auditors; $!+))%00!!.!2%!3! * %/1//! 0$!1 %0! **1(**%(/00!)!*0/+"0$! +),*5* %0/1/% %.%!/3%0$0$!)*#!)!*0%*0!.*(1 %0+./* !40!.*( auditors taking into consideration that: + *#!)!*0%/.!/,+*/%(!"+.0$!+),*5/**%(/00!)!*0/* 0$!.!(0! /00!)!*0/+"**%(+* %0%+** .!/1(0/+"+,!.0%+*/* o SGV & Co., the external auditor, is responsible for expressing an opinion on the +*"+.)%05* 0$!+),*5/1 %0! **%(/00!)!*0/3%0$0$!$%(%,,%*!/ Financial Reporting Standards and International Financial Reporting Standards, as appropriate.

/! +*0$!"+.!#+%*#* 0$!.!(0! %/1//%+*/1* !.0'!** /1&!00+0$!(%)%00%+*/+"our roles and responsibilities, the Audit Committee presents this Report to the Board of Directors.

Mr. ANTONIO JOSE PERIQUETChairman

Mr. EMMANUEL DE DIOSMember

Mr. SALVADOR TIRONAChairman

Statements of Management's

Responsibility for Financial

STATEMENTSReport of the Audit

COMMITTEE

STATEMENT OF MANAGEMENT'S RESPONSIBILITYFOR FINANCIAL STATEMENTS

The management of ABS-CBN Corporation and Subsidiaries is responsible for the preparation * "%.,.!/!*00%+*+"0$!+*/+(% 0! **%(/00!)!*0//+"* "+.0$!5!./!* ! December 31, 2014 and 2013 and January 1, 2013, including the additional components attached therein, in accordance with Philippine Financial Reporting Standards. This responsibility includes designing and implementing internal controls relevant to the preparation and fair presentation of +*/+(% 0! **%(/00!)!*0/0$0.!".!!".+))0!.%()%//00!)!*03$!0$!. 1!0+".1 or error, selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

$!+. +"%.!0+./.!2%!3/* ,,.+2!/0$!+*/+(% 0! **%(/00!)!*0/* /1)%0/the same to the stockholders.

SyCip Gorres Velayo & Co., the independent auditors, appointed by the stockholders has examined 0$!+*/+(% 0! **%(/00!)!*0/+"0$!+),*5%*+. *!3%0$$%(%,,%*!0* . /on Auditing, and in its report to the stockholders, has expressed its opinion on the fairness of presentation upon completion of such examination.

Eugenio L. Lopez III Ma. Rosario N. Santos-Concio$%.)*+"0$!+. .!/% !*0* $%!"4!10%2!!.

Rolando P. Valdueza Aldrin M. Cerrado.+1,$%!"%**%(!. $%!"%**%(!.

ABS-CBN BROADCAST CENTER, SGT. E.A. ESGUERRA AVENUE COR. MOTHER IGNACIA ST., QUEZON CITY, PHILIPPINESTEL. NOS.: (632) 924-4101 | (632) 415-2272

ABS-CBN CORPORATION Report of the Audit Committee for the Year Ended December 31, 2014

To The Board of Directors:

$!1 %0+))%00!!%*"1((()!*0+"%0/+2!./%#$0.!/,+*/%%(%0%!/.!,.!/!*0/* //%/0/0$!Board by looking at the:

!/+*(!*!//+"0$!+),*5/**%(/00!)!*0* !%!*5+"0$!**%( reporting process; !(%%(%05+"0$!%*0!.*(+*0.+(!*2%.+*)!*0 &!0%2%05%* !,!* !*!* !!0%2!*!//+"%*0!.*(1 %0"1*0%+*/* ,.+!// 1(%0%+*/%* !,!* !*!* "!!/+"0$!+),*5/!40!.*(1 %0+./3%0$.!#. 0+ 0$!**1(.!2%!3+"0$!+),*5/**%(/00!)!*0/* +),*5/+),(%*!3%0$(!#(* .!#1(0+.5.!-1%.!)!*0/

The role and responsibilities of the Audit Committee are embodied in an Audit Committee Charter. ++),(53%0$0$!/% $.0!.0$!1 %0+))%00!!+*.)/0$0

$!)&+.%05+"0$!1 %0+))%00!!.!%* !,!* !*0 %.!0+./%*(1 %*#0$!$%.)* 1.0!.(5)!!0%*#3!.!$!( * 00!* ! 50$!$%.)** )!)!./+"0$! Committee; $!+))%00!!.!2%!3! * ,,.+2! %*0!.*(1 %0/+,!* ,(*//3!((/0$! manpower resources and competencies necessary to carry out the audit plan; $!+))%00!!.!2%!3! * %/1//! 0$!.!,+.0/+"0$!%*0!.*(1 %0+./%*(1 %*# necessary corrective actions, with concerned management and the internal auditors; $!+))%00!!.!2%!3! * %/1//! 0$!1 %0! **1(**%(/00!)!*0/+"0$! +),*5* %0/1/% %.%!/3%0$0$!)*#!)!*0%*0!.*(1 %0+./* !40!.*( auditors taking into consideration that: + *#!)!*0%/.!/,+*/%(!"+.0$!+),*5/**%(/00!)!*0/* 0$!.!(0! /00!)!*0/+"**%(+* %0%+** .!/1(0/+"+,!.0%+*/* o SGV & Co., the external auditor, is responsible for expressing an opinion on the +*"+.)%05* 0$!+),*5/1 %0! **%(/00!)!*0/3%0$0$!$%(%,,%*!/ Financial Reporting Standards and International Financial Reporting Standards, as appropriate.

/! +*0$!"+.!#+%*#* 0$!.!(0! %/1//%+*/1* !.0'!** /1&!00+0$!(%)%00%+*/+"our roles and responsibilities, the Audit Committee presents this Report to the Board of Directors.

Mr. ANTONIO JOSE PERIQUETChairman

Mr. EMMANUEL DE DIOSMember

Mr. SALVADOR TIRONAChairman

INDEPENDENT AUDITORS REPORT

The Stockholders and the Board of DirectorsABS-CBN Corporation

We have audited the accompanying consolidated financial statements of ABS-CBN Corporation and Subsidiaries, which comprise theconsolidated statements of financial position as at December 31, 2014 and 2013, and the consolidated statements of income, statements ofcomprehensive income, statements of changes in equity and statements of cash flows for each of the three years in the period endedDecember 31, 2014, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance withPhilippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparationof consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits inaccordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financialstatements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement ofthe consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internalcontrol relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitysinternal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of ABS-CBN Corporationand Subsidiaries as at December 31, 2014 and 2013, and their financial performance and their cash flows for each of the three years in theperiod ended December 31, 2014 in accordance with Philippine Financial Reporting Standards.

SYCIP GORRES VELAYO & CO.

Catherine E. LopezPartnerCPA Certificate No. 86447SEC Accreditation No. 0468-AR-2 (Group A), February 14, 2013, valid until February 13, 2016Tax Identification No. 102-085-895BIR Accreditation No. 08-001998-65-2012, April 11, 2012, valid until April 10, 2015PTR No. 4751291, January 5, 2015, Makati City

March 5, 2015

SyCip Gorres Velayo & Co.6760 Ayala Avenue1226 Makati CityPhilippines

Tel: (632) 891 0307Fax: (632) 819 0872ey.com/ph

BOA/PRC Reg. No. 0001, December 28, 2012, valid until December 31, 2015SEC Accreditation No. 0012-FR-3 (Group A), November 15, 2012, valid until November 16, 2015

A member firm of Ernst & Young Global Limited

ABS-CBN CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL POSITION(Amounts in Thousands)

December 312014 2013

ASSETS

Current AssetsCash and cash equivalents (Note 6) P=13,238,377 P=10,616,855Trade and other receivables (Notes 7 and 22) 10,717,317 8,333,761Program rights and other intangible assets (Note 11) 1,315,987 1,385,972Other current assets (Note 8) 3,669,314 3,046,886

Total Current Assets 28,940,995 23,383,474

Noncurrent AssetsProperty and equipment (Notes 9, 10, 17 and 30) 20,572,543 18,535,905Program rights and other intangible assets - net of current portion (Note 11) 6,465,599 5,429,192Goodwill (Notes 4 and 15) 5,289,956 5,288,350Available-for-sale (AFS) investments (Note 12) 242,368 219,191Investment properties (Notes 9, 10 and 17) 198,734 196,916Investments in associates and joint ventures (Note 13) 199,874 166,591Deferred tax assets - net (Note 28) 2,858,187 2,530,164Other noncurrent assets (Note 14) 2,468,564 2,580,033

Total Noncurrent Assets 38,295,825 34,946,342

TOTAL ASSETS P=67,236,820 P=58,329,816

LIABILITIES AND EQUITY

Current LiabilitiesTrade and other payables (Notes 16, 22 and 29) P=12,788,120 P=11,332,006Income tax payable 292,053 193,216Obligations for program rights (Note 18) 724,266 448,861Interest-bearing loans and borrowings (Notes 9, 10 and 17) 110,751 1,345,471

Total Current Liabilities 13,915,190 13,319,554

Noncurrent LiabilitiesInterest-bearing loans and borrowings - net of current portion

(Notes 9, 10 and 17) 20,214,484 13,334,579Obligations for program rights - net of current portion (Note 18) 224,472 276,344Accrued pension obligation and other employee benefits (Note 29) 4,790,813 4,191,082Deferred tax liabilities - net (Note 28) 587,654 637,533Convertible note (Note 19) 190,522 245,195Other noncurrent liabilities (Note 20) 438,857 402,772

Total Noncurrent Liabilities 26,446,802 19,087,505

(Forward)

December 312014 2013

Equity Attributable to Equity Holders of the Parent CompanyCapital stock (Note 21):

Common P=872,124 P=872,124Preferred 200,000 200,000

Additional paid-in capital (Notes 2, 4 and 21) 4,495,050 4,495,050Exchange differences on translation of foreign operations (456,773) (270,632)Unrealized gain on AFS investments (Note 12) 143,281 121,766Share-based payment plan (Note 21) 34,349 34,349Retained earnings (Note 21) 21,363,395 19,817,957Philippine depository receipts convertible to common shares (Note 21) (1,264,096) (1,164,146)

Equity attributable to Equity Holders of the Parent 25,387,330 24,106,468Noncontrolling Interests (Notes 4 and 23) 1,487,498 1,816,289

Total Equity 26,874,828 25,922,757

TOTAL LIABILITIES AND EQUITY P=67,236,820 P=58,329,816

See accompanying Notes to Consolidated Financial Statements.

ABS-CBN CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(Amounts in Thousands, Except Per Share Amounts)

Years Ended December 312014 2013 2012

REVENUEAdvertising revenue (Note 22) P=18,879,946 P=19,331,908 P=16,611,731Sale of services (Note 30) 14,029,684 13,287,245 11,827,501Sale of goods (Note 22) 351,528 579,140 421,079Others 282,470 179,611 123,329

33,543,628 33,377,904 28,983,640

PRODUCTION COSTS (Notes 9, 11, 22, 24, 29 and 30) (11,007,656) (11,499,365) (10,555,162)

COST OF SERVICES (Notes 8, 9, 11, 14, 22, 25, 29 and 30) (9,045,527) (8,853,440) (8,061,381)

COST OF SALES (Notes 8, 9, 22, 25, 29 and 30) (201,993) (330,029) (292,095)

GROSS PROFIT 13,288,452 12,695,070 10,075,002

GENERAL AND ADMINISTRATIVE EXPENSES(Notes 7, 8, 9, 10, 11, 21, 22, 26, 29 and 30) (10,113,904) (9,614,356) (8,221,168)

FINANCE COSTS (Note 17, 19 and 27) (1,165,313) (816,919) (816,701)

INTEREST INCOME (Notes 6 and 22) 153,968 94,438 119,672

FOREIGN EXCHANGE GAINS (LOSSES) - net (31,704) (145,500) 111,784

EQUITY IN NET EARNINGS (LOSSES) OF ASSOCIATES ANDJOINT VENTURES (Note 13) 3,283 (12,397) (58)

LOSS ON SALE OF INVESTMENTS (Note 12) (24,781)

OTHER INCOME - net (Notes 14, 19, 27 and 30) 652,352 512,322 788,099

INCOME BEFORE INCOME TAX 2,787,134 2,712,658 2,031,849

PROVISION FOR INCOME TAX (Note 28) 756,998 684,311 413,950

NET INCOME P=2,030,136 P=2,028,347 P=1,617,899

Attributable toEquity holders of the Parent Company (Note 33) P=2,387,085 P=2,145,725 P=1,580,623Noncontrolling interests (356,949) (117,378) 37,276

P=2,030,136 P=2,028,347 P=1,617,899

Basic/Diluted Earnings per Share Attributableto Equity Holders of the Parent Company (Note 33) P=2.867 P=2.678 P=2.132


ABS-CBN CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(Amounts in Thousands)


NET INCOME P=2,030,136 P=2,028,347 P=1,617,899

OTHER COMPREHENSIVE INCOME (LOSS)Other comprehensive income (loss) not to be reclassified to profit

and loss in subsequent periods:Remeasurement gain (loss) on defined benefit plan

(Note 29) (478,239) 639,129 (130,921)Income tax effect 143,472 (191,739) 39,276

(334,767) 447,390 (91,645)Other comprehensive income (loss) to be reclassified to profit

and loss in subsequent periods:Exchange differences on translation of foreign operations (186,141) 367,657 (279,753)Unrealized fair value gain (loss) on AFS

investments - net (Note 12) 21,515 (4,910) 6,853(164,626) 362,747 (272,900)

OTHER COMPREHENSIVE INCOME (LOSS) (499,393) 810,137 (364,545)

TOTAL COMPREHENSIVE INCOME P=1,530,743 P=2,838,484 P=1,253,354

Attributable to:Equity holders of the Parent Company P=1,895,412 P=2,906,433 P=1,413,954Noncontrolling interests (364,669) (67,949) (160,600)

P=1,530,743 P=2,838,484 P=1,253,354


ABS-CBN CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012(Amounts in Thousands)

Attributable to Equity Holders of the Parent Company

Additional

ExchangeDifferences inTranslation of

UnrealizedGain

on Available-for-Sale

Remeasure-mentGain (Loss) on

Defined BenefitShare-based

Payment

PhilippineDepository

ReceiptsConvertibleto Common

Capital Stock (Note 21) Paid-in Foreign Investments Plan - Net Plan Retained Earnings (Note 21) Shares NoncontrollingCommon Preferred Capital Operations (Note 12) (Note 29) (Note 21) Appropriated Unappropriated (Note 21) Total Interests Total Equity

At December 31, 2013 P=872,124 P=200,000 P=4,495,050 (P=270,632) P=121,766 P= P=34,349 P=16,200,000 P=3,617,957 (P=1,164,146) P=24,106,468 P=1,816,289 P=25,922,757Net income 2,387,085 2,387,085 (356,949) 2,030,136Other comprehensive income (loss) (186,141) 21,515 (327,047) (491,673) (7,720) (499,393)Total comprehensive income (loss) (186,141) 21,515 (327,047) 2,387,085 1,895,412 (364,669) 1,530,743Remeasurement loss on defined

benefit plan transferred toretained earnings 327,047 (327,047)

Cash dividends declared (514,600) (514,600) (514,600)Acquisition of PDRs (99,950) (99,950) (99,950)Additional investment (Note 2) 35,878 35,878At December 31, 2014 P=872,124 P=200,000 P=4,495,050 (P=456,773) P=143,281 P= P=34,349 P=16,200,000 P=5,163,395 (P=1,264,096) P=25,387,330 P=1,487,498 P=26,874,828

At December 31, 2012 P=779,585 P= P=679,069 (P=638,289) P=126,676 P= P=28,952 P=8,300,000 P=9,270,834 (P=1,164,146) P=17,382,681 P=2,039,150 P=19,421,831Net income 2,145,725 2,145,725 (117,378) 2,028,347Other comprehensive income (loss) 367,657 (4,910) 397,961 760,708 49,429 810,137Total comprehensive income (loss) 367,657 (4,910) 397,961 2,145,725 2,906,433 (67,949) 2,838,484Remeasurement gain on defined

benefit plan transferred toretained earnings (397,961) 397,961

Cash dividends declared (296,563) (296,563) (296,563)Reversal of appropriation of retained

earnings (8,300,000) 8,300,000 Appropriation of retained earnings 16,200,000 (16,200,000) Share-based payment plan 5,397 5,397 5,397Issuance of common stock 92,539 3,846,962 3,939,501 3,939,501Issuance of preferred stock 200,000 200,000 200,000Decrease in noncontrolling interests

(Note 2) (30,981) (30,981) (154,912) (185,893)At December 31, 2013 P=872,124 P=200,000 P=4,495,050 (P=270,632) P=121,766 P= P=34,349 P=16,200,000 P=3,617,957 (P=1,164,146) P=24,106,468 P=1,816,289 P=25,922,757

At December 31, 2011 P=779,585 P= P=725,274 (P=358,536) P=119,823 P= P= P=8,300,000 P=8,177,105 (P=1,164,146) P=16,579,105 P=2,043,807 P=18,622,912Net income 1,580,623 1,580,623 37,276 1,617,899Other comprehensive income (loss) (279,753) 6,853 106,231 (166,669) (197,876) (364,545)Total comprehensive income (loss) (279,753) 6,853 106,231 1,580,623 1,413,954 (160,600) 1,253,354Remeasurement gain on defined

benefit plan transferred toretained earnings (106,231) 106,231

Cash dividends declared (593,125) (593,125) (593,125)Share-based payment plan 28,952 28,952 28,952Acquisition of noncontrolling

interests (Note 4) (57,916) (57,916) (43,635) (101,551)Effect of business combination under

common control 11,711 11,711 199,578 211,289At December 31, 2012 P=779,585 P= P=679,069 (P=638,289) P=126,676 P= P=28,952 P=8,300,000 P=9,270,834 (P=1,164,146) P=17,382,681 P=2,039,150 P=19,421,831


ABS-CBN CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in Thousands)


CASH FLOWS FROM OPERATING ACTIVITIESIncome before income tax P=2,787,134 P=2,712,658 P=2,031,849Adjustments for:

Depreciation and amortization (Notes 9 and 10) 2,871,000 2,714,199 2,825,196Amortization of:

Program rights and other intangibles (Note 11) 1,327,894 1,430,811 1,277,597Debt issue costs (Note 27) 122,975 73,421 65,576Deferred charges (Note 25) 69,617 52,871 53,166

Interest expense (Note 27) 1,023,958 716,894 731,633Gain on settlement of liabilities (Note 27) (444,826) (13,910) (208,564)Interest income (Notes 6 and 22) (153,968) (94,438) (119,672)Net unrealized foreign exchange loss (gain) (69,427) 2,836 (20,329)Loss (gain) on sale of property and equipment 4,167 5,688 (89,121)Equity in net losses (earnings) of associates and

joint ventures (Note 13) (3,283) 12,397 58Impairment loss (Note 15) 20,061 Share-based payment expense (Note 21) 5,397 25,256Loss on sale of investments (Note 12) 24,781

Income before working capital changes 7,535,241 7,638,885 6,597,426Provisions for:

Pension expense and other employee benefits (Note 29) 785,092 973,670 1,041,210Doubtful accounts (Note 26) 530,573 432,094 389,904

Decrease (increase) in:Trade and other receivables (2,886,288) (814,390) (2,239,244)Other current assets (626,555) 65,175 1,485,137

Increase (decrease) in:Trade and other payables 985,677 356,911 695,427Obligations for program rights 225,297 239,177 (217,963)Other noncurrent liabilities (371,221) (5,461) (136,802)

Contribution to pension plan (Note 29) (254,000) (540) (360,000)Cash generated from operations 5,923,816 8,885,521 7,255,095Income taxes paid (912,745) (830,461) (626,732)Net cash provided by operating activities 5,011,071 8,055,060 6,628,363

(Forward)


CASH FLOWS FROM INVESTING ACTIVITIESAdditions to:

Property and equipment (Notes 9 and 34) (P=4,991,980) (P=3,727,670) (P=3,733,534) Program rights and other intangible assets (Notes 11 and 34) (1,433,238) (1,772,969) (1,495,770)

Investment properties (Notes 10 and 34) (2,508) Decrease (increase) in other noncu

1436942917_abs-cbn-annual-report-2014

Documents

Transcript of 1436942917_abs-cbn-annual-report-2014